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CIRCULAR No

CIRCULAR No. 56/2001/TT-BKHCNMT OF OCTOBER 26, 2001 GUIDING THE INVESTMENT COOPERATION WITH FOREIGN COUNTRIES IN SCIENTIFIC AND TECHNOLOGICAL ACTIVITIES UNDER DECREE No. 06/2000/ND-CP

Pursuant to the Government�s Decree No. 22/CP of May 22, 1993 on the tasks, powers and organizational structure of the Ministry of Science, Technology and Environment;

Pursuant to the Government�s Decree No. 06/2000/ND-CP of March 6, 2000 on the investment cooperation with foreign countries in the fields of medical examination and treatment, education and training and scientific research (hereinafter referred to as Decree No. 06/2000/ND-CP for short);

Pursuant to the Government�s Decree No. 24/2000/ND-CP of July 31, 2000 detailing the implementation of the Law on Foreign Investment in Vietnam (hereinafter referred to as Decree No. 24/2000/ND-CP for short);

The Ministry of Science, Technology and Environment hereby guides the implementation of the contents on investment cooperation with foreign countries in scientific and technological activities under Decree No. 20/2000/ND-CP as follows:

I. General Provisions

1. Scope of application

This Circular guides the investment cooperation with foreign countries regarding scientific and technological activities. Scientific and technological activities in cooperation with foreign countries not for profit purposes shall not be subject to this Circular.

2. Participants in investment cooperation

The following subjects shall be eligible for participating in investment cooperation in order to establish foreign-invested scientific and technological organizations:

a/ Research institutes, research centers and other organizations conducting scientific, technical and technological researches, researching into natural sciences, economic administration science and linguistics, which are scientific public-service units of the State economic sector;

b/ Research institutes, research centers and other organizations conducting scientific, technical and technological researches, researching into natural sciences, economic administration science and linguistics, which are of other economic sectors;

c/ Vietnamese enterprises, including enterprises established under the Law on State Enterprises, the Law on Enterprises and the Law on Cooperatives;

d/ Vietnamese (including overseas Vietnamese);

e/ Foreign-invested enterprises;

f/ Foreign investors.

3. Interpretation of terms

A number of terms and expressions used in this Circular shall be construed as follows:

Science means the system of knowledge of phenomena, things and rules of the nature, society and thinking;

Technology means a combination of methods, processes, skills, know-hows, tools and means used for converting resources into products;

Scientific and technological activities include activities of scientific research, technological research and development, scientific and technological services, promotion of innovations, technical modifications, production rationalization, as well as other activities aimed to develop science and technology.

Scientific research means activities of discovering and inquiring into phenomena, things and rules of the nature, society and thinking; creating solutions for practical application. Scientific research includes basic research and applied research.

Technological development is an activity aiming to create and perfect new technologies and/or new products. Technological development includes experimental deployment and trial production.

Experimental deployment means activities of applying scientific research results to experiments, in order to create new technologies and/or new products.

Trial production means activities of applying experimental deployment results to small-scale trial production in order to perfect new technologies and/or new products before introducing them to production and life.

Scientific and technological services mean activities in service of scientific research and technological development; activities related to intellectual property, technology transfer; services of information, consultancy, training, fostering, popularization, application of scientific and technological knowledge as well as practical experiences.

Foreign investors means foreign economic organizations and individuals that invest in Vietnam.

Foreign-invested enterprises include joint-venture enterprises and enterprises with 100% foreign investment capital, operating in Vietnam.

Foreign-invested scientific and technological organizations (FIST organizations) means research institutes, research centers or establishments (stations, farms, laboratories, etc.) that conduct scientific and technological activities financed by foreign capital.

4. Preferential regime

FIST organizations that have projects on the list of particularly encouraged investment projects shall be entitled to the preferences provided for in Decree No.24/2000/ND-CP as well as other preferences provided for in the Science and Technology Law and documents guiding the implementation thereof. In cases where the preferences under the foreign investment legislation are different from those under the science and technology legislation, such FIST organizations may opt for the preferential levels they are entitled to.

II. Contents of investment cooperation with foreign countries in scientific and technological activities

The investment cooperation with foreign countries in scientific and technological activities under this Circular shall cover the following contents:

1. Scientific research or technological development in one of the following specialized fields:

a/ Natural sciences;

b/ Technical sciences and technologies (including such fields as agriculture, medicine and pharmacy);

c/ Economic administration science;

d/ Linguistics.

In the above-said fields, it is prohibited to conduct activities which are detrimental to the national security, defense, fine traditions and customs, social order and safety, human health, environment, and other prohibited acts prescribed by the Vietnamese law.

2. Scientific and technological services.

III. Forms of investment cooperation with foreign countries in scientific and technological activities

The investment cooperation with foreign countries in scientific and technological activities shall be undertaken in one of the following forms:

1. Joint ventures: Vietnamese parties and foreign parties jointly establish research institutes, research centers or other establishments (stations, farms, laboratories, etc.) to conduct scientific and technological activities in the fields specified in Section II of this Circular.

2. Business cooperation contracts: Vietnamese parties and foreign parties enter into business cooperation on a contractual basis to conduct scientific and technological activities in the fields specified in Section II of this Circular.

3. Pilot form: The form of enterprises with 100% foreign capital to conduct scientific and technological activities in the fields specified in Section II of this Circular.

IV. Conditions for establishment and operation of FIST organizations

A FIST organization shall be allowed to operate only after being granted the investment license.

All projects for investment cooperation with foreign countries in scientific and technological activities are group-A projects. To be granted an investment license, apart from the conditions prescribed for ordinary group-A projects, a FIST organization must also satisfy the following conditions:

1. Contents of scientific and technological activities are in line with investment objectives and the Vietnamese State�s scientific and technological development orientation.

2. It has at least 5 research cadres of university, college or higher level working on a full-time basis in the licensed operation field(s). FIST organization�s head must have attained the university or higher level in the licensed operation field.

3. It has a material and technical foundation, facilities and equipment suitable to the type and scale of scientific and technological activities, more concretely:

a/ It is headquartered at the administration body of the FIST organization.

b/ It has facilities and equipment for efficiently conducting scientific and technological activities in the licensed operation field(s).

V. Organization of implementation

1. Dossiers of application for investment licenses for scientific and technological activities

A dossier of application for an investment license filed by a FIST organization shall comprise documents specified in Article 107 of Decree No.24/2000/ND-CP, in which the investor should clarify the following contents:

a/ Objectives, scale, field and type of scientific and technological activities;

b/ Projected number and structure of key research personnel;

c/ Material and technical foundation, facilities and equipment;

d/ Decision of the Vietnamese party�s direct management body (in cases the concerned Vietnamese party is an organization using State-owned capital) approving the participation in the FIST organization.

2. Competence to certify FIST organizations

Basing itself on the dossiers of application for investment licenses and the conditions for establishment and operation of FIST organizations prescribed in this Circular, the Ministry of Science, Technology and Environment shall have to certify such FIST organizations. On the basis of approval of the Ministry of Science, Technology and Environment, the Ministry of Planning and Investment shall decide to grant investment licenses together with decisions on preferential regime to FIST organizations and, within 3 working days, have to send copies of the said decisions to the Ministry of Science, Technology and Environment, so that the latter shall register scientific and technological activities for FIST organizations.

VI. Implementation provisions

This Circular takes effect 15 days after its signing.

Any problems arising in the course of implementation should be promptly reported to the Ministry of Science, Technology and Environment for study, and appropriate amendment and supplement, or specific settlement guidance.

Minister of Science, Technology and Environment
CHU TUAN NHA